Case Law Details
Anidhi Impex Pvt. Ltd. v. ITO (ITAT Mumbai)
INTRODUCTION
On August 27, 2013, the AO served notice under section 143(2) on a specific individual who worked part-time for the assessee till March 31, 2011. After the deadline for the original notice had passed, the AO once more sent notices to the directors in accordance with section 143(2). The Tribunal noted that the assessee had provided an affidavit from the part-time employee stating that the said individual had declined to accept the notice (as he was no longer involved with the assessee) and that he was unable to convey the notice to the company due to the change in address. The directors also submitted affidavits that reiterated the facts. The Tribunal determined that the notice was not served on a person who was authorized to receive it, which resulted in invalid service or non-service of notice, and that the assessment order under section 143(3) was to be quashed after considering the provisions of Section 282 of the Act and the provisions of the Civil Procedure Code, 1908.
FACT OF THE CASE
The Assessee is an employee engaged in the business of trading in non-ferrous metal and also buying and sale of shares and securities Filed its income tax return for AY 2012-2013 declaring total income at Nil. On August 27, 2013, the AO gave notice under Section 143(2) to a specific individual who had worked part-time for the Assessee until March 31, 2011. It was selected for scrutiny through CASS. The AO asserts that notice pursuant to Section 143(2) was issued on August 8, 2013, and that it was properly served on the assessee on August 27, 2013. After that, notice pursuant to Section 142(1) dated April 23, 2014, was sent to the assessee’s registered address, however that notice was returned by the postal service with the notation “not known.” More notices under section 142(1) of the Act were issued, but the assessee was unable to receive any of them. According to section 142(1) of the Act, the AO delivered the notice to directors Mahendra B. Jain and Jaswant J. Shah in January 2015 at the addresses listed in their income tax returns. By letter dated February 6, 2015, the assessee responded to the notice by filing certain details requested by the AO in his assessment order through its designated representative. On March 24, 2015, the assessee additionally sent a letter in which they objected to the proposed assessment procedures under Section 143(3) on the grounds that Section 143(2)’s notice-serving deadline had not been met and that the assessment proceedings were therefore legally invalid. After taking into account the assessee’s arguments, the AO rejected the objection raised by the assessee regarding the non-service of the notice required by section 143(2) of the Act, noting that the notice was properly served on the assessee on August 27, 2013, and it was also served on or before the due date specified by the Act. The AO also pointed out that the assessee raised this objection toward the end of the assessment, as the deadline for completing the assessment was drawing near, in an effort to evade scrutiny proceedings and to cover up incorrect claims made in relation to a number of expenses in its financial statements. Therefore, the objection submitted by the assessee through its authorized ITA agent is without merit, and as a result, the objection for non-service of notice raised by the assessee was dismissed.
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